The shell by default ignores spaces, you have to specifically force it to acknowledge them by enclosing the name in quotation marks or escaping with a backslash. In that situation, a command line tool should do what it's told, not disobey a direct command. Leave the rubber padded tools for the GUI land.
Validity? It's a string like any other. It's not mkdir's job to second-guess what I tell it to do.
And I don't see how it violated such principle. You tell it to create a file with spaces - you even emphasized them with quotes -, and you're surprise it did so?
